Expat Finances - financial aspects of being an expat in France

Section kindly contributed by Steven Grover - see contact details at the bottom of this page if you would like further information.

Is your pension going to live up to your retirement plans, or are you heading for shortfall ?

The first thing to do, if you have not done so already, is to get a UK State Pension forecast telling you, in today's money, the State Pension you have already earned in the UK, and what you can expect to have earned by State Pension retirement age. You can request a forecast from the Pension Service web site - www.thepensionservice.gov.uk 

You may also have been in a company scheme in the UK or be employed in France in which case you’ll receive a pension at retirement which is normally based on your length of service and salary level. However unless you have been employed by the same company and in the same pension scheme for forty years or more, this is still likely to fall short of two thirds of your final salary.

This should roughly give you an idea of what you could expect from your pensions, but the question is are they going to provide the standard of living you want for your retirement!

Are the same Investments available in France as in the UK ?

The simple answer is that nearly everything you could have found in the UK you can find in France, but with the added benefit of being Euros. Which, if you are intending on staying in France, will help protect your capital and income from currency movement, plus you get the added advantage of not needing an international money transfer to access your funds. You will also find that several of the investment products available will offer protection of your investment income from tax. But the most important thing to remember is to seek sound advice regarding savings and investments from an adviser who is aware of the French tax authority’s views on UK products such as PEPs/ISAS, and knows the differences between the French and UK financial environments. 

Inheritance tax in France?

Inheritance is probably the greatest cause of concern for the majority of expatriates in France as the rules are so different from the UK, and involve the automatic inheritance rights of children which can potentially override the wishes of the deceased. Inheritance tax between spouses also exists in France, and Inheritance tax rates also depend on your relationship to your heirs.

Although the new French government has suggested it will be looking into reviewing this law, there are a few solutions available under the existing law one of which is likely to fit your personal situation. A good example is “Assurance Vie” which is a type of Life Insurance scheme where you can invest in a huge range of different managed funds. Which will allow important sums to be transmitted to beneficiaries in the event of death, outside of the deceased’s estate for inheritance-tax purposes.

 

What’s the Difference between a French and UK Mortgage ?

The types of mortgages available from French lenders are very close to those offered in the UK, with both offering fixed and variable interest rates. The interest rate payable is normally decided by how much you need to borrow compared to the value of the property you are buying. Interest rates are set by the lenders, which are in turn influenced by either Euribor for French lenders or the Bank of England base rate for UK lenders. But normally in France you will find that access to more competitive mortgage deals will be helped by a larger deposit.

As with the UK, the property is used as security for releasing funds, and lenders have set criteria regarding eligibility requirements for obtaining a mortgage.

Generally you will also find with French mortgages, variable rate loans tend to have no early redemption penalties, whilst fixed rate loans tend to charge an early redemption penalty.

 

Who are we?

I am an English Chartered Institute of Insurance qualified expatriate based in Troyes, within the Champagne region of Northern France. I have over 10 years management experience in the UK financial services market, as well as 8 years exposure to French life and the potential pitfalls with insurance, investments, pensions and day to day life.

Financial Expat is registered and licensed in France under the European wide “umbrella group” of TSG insurance Services (The Spectrum Group). Spectrum is committed to undertaking a confidential full financial planning review of client affairs before making any recommendation. This process is not subject to any charge and is completed during a personal interview with a licensed adviser. It’s also extremely important, when selecting an IFA to check that the IFA is registered and licensed in the relevant Country. To that end we suggest you look at the following websites to establish our credentials.

TSG Insurance Services S.a.r.l. .
This is the website of the Association de la liste des Courtiers d'Assurances.
Click "Recherche", select "T", find "TSG Insurances Services", click on our number.

This is the website of the Fédération Française des Courtiers d'Assurances.
Click on "Ile de France", then "Rechercher un adherent", then enter TSG Insurance Services in the name of the cabinet and search.

If you have a question, want to arrange for a free financial review or just want further information I can be contacted on +33 (0)325461631 or at Steve@financialexpat.com

Return to Life in France articles